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Question about untaxed income on the FAFSA?

I'm filling out the FAFSA as an independent (for grad school). I worked at my school last year as a student employee (non-work student). For some reason, student employees here--even non-WS--don't pay taxes during the academic year, but do during the same. In this case, do I put my income from the income year in the "untaxed income" line on the FAFSA? I'm assuming "yes," but thought I'd double-check.

I'm not a financial aid expert, but I do know that if what you were paid was considered a stipend or fellowship that covered tuition, then it may not be taxable, not included on your tax return, and does not have to be added back into your FAFSA. But if it was over qualified tuition, then even if no taxes were taken out, it has to be included in your tax return. Taxes may or may not be due on it depending on the amount. And since it's already on your tax return, it does not need to be added into your FAFSA.

DD worked on campus. Her job was TAXABLE but it did not have taxes taken out. There is a difference. I believe your income from your campus job goes under taxable income. Disclaimer...I'm just a parent with a kid who had the same job/tax issues.

For students working on campus....they CAN elect to not have taxes taken out of their pay with the assumption that their overall earnings will not exceed the amount that would require them to actually PAY income taxes. This is what DD did.

However, beware if you do this...yes, you will not have deductions taken out your pay each pay period....BUT if you do happen to exceed the earnings amount, you will be required to pay the taxes owed when you file. DD did not have taxes taken out of her campus job last year...but she earned $7000 overall..and guess what...she had to send the IRS a $250 check in owed taxes when she file.

The income is income from work, which is listed under that heading when filling out the FAFSA. If the student is not required to file a tax return, then that is all he needs to report. If he earned enough that he was required to file a return, there will also be amounts listed under AGI & taxes paid on the FAFSA (from the tax return) ... if a student earns enough that he is required to file but does not do so, he is not eligible to receive financial aid (we get a handful of students like this every year).

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